20% of Businesses Still Haven’t Outsourced Their Working Capital Optimization

Most U.S. and Canadian firms are aware of the transformative impact that third-party providers can bring to their working capital and are working with at least one such provider to help ensure they are getting the most out of the resources they have.

In fact, 79% of U.S. and Canadian businesses use third-party providers to help optimize their working capital, according to Accelerating The Time To Realized Revenue, a PYMNTS and Mastercard collaboration based on a survey of 400 corporate executives.

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In the U.S., large-market firms are more likely than mid-market ones to use third-party providers in this way, with 99% of large-market U.S. firms and 56% of mid-market U.S. firms doing so.

In Canada, mid-market firms are more likely than large-market ones to use at least one third-party provider to enhance their working capital. Eighty-eight percent of Canadian mid-market businesses do so, compared to 82% of Canadian large-market firms.

Better cash flow visibility, better forecasting and process automation are some of the ways in which these firms have seen their working capital optimization processes improve after working with third-party providers. Those are the three benefits cited by the greatest shares of all the firms responding to the survey — 52%, 43% and 36% respectively.

The next most cited benefits of working capital optimization observed while using one or more outside vendors are credit protection, reduced days sales outstanding (DSO), improved payments knowledge and less tied capital.

Among firms in the U.S., better cash flow visibility is considered the top way in which third-party providers can enhance firms’ working capital, with that being cited as a benefit by 55% of U.S. large-market firms and 60% of U.S. mid-market firms.

Canadian large-market firms are most likely to point to better forecasting, with 55% of them doing so, while Canadian mid-market businesses are most likely to cite process automation, with 51% of them saying that’s a benefit.